CHAD: Civil society disappointed by World Bank oil pull-out

Monday, September 15, 2008

Civil society members are disappointed the World Bank investment in oil exploitation in the Doba oil fields in southern Chad has broken down.

The landmark 2001 deal between the World Bank, a US-oil consortium and the Chad government aimed to ensure the government harnessed its newfound oil wealth to reduce poverty across the country.

The deal gave oil-producing communities in the south five percent of the royalties, and the national government 15 percent. The remainder was to be spent on the country’s crumbling infrastructure, including its roads, schools and health care facilities, as well as to help cash-strapped rural areas.

But Michel Wormser, director of Africa operations with the World Bank, told IRIN the Chad government failed to meet its anti-poverty investment promises, “Not only was the level of investment not being met, but also the quality [of anti-poverty measures] was not there.”

Oil wealth fails to trickle to local population

In 2004, its first year of full production, Chad’s gross domestic product (GDP) jumped 18 percent to reach almost 30 percent growth in large part because of its newfound oil revenue, according to the World Bank.

Thus far in 2008, Chad has earned US$1.4 billion in oil revenues, said Wormser.

Despite this revenue boost, more than 60 percent of the population still lives in poverty, according to the UN.

Wormser said the government has invested too little in infrastructure and social programs, and the programs it did put into place were poorly designed and executed.

“Roads that were constructed were not maintained, schools were not completed. Clinics had nothing on the shelves. The benefits to the population were very limited.”

The government added security as a national priority area to enable more arms spending, according to a report by the US-based think-tank The Council on Foreign Relations.

The government subsequently re-negotiated with the World Bank to double its share of oil revenue to 30 percent.

Civil society response

Delphine Djiraibé Kemneloum, coordinator of Chad-based non-profit the Monitoring Committee for Peace and Reconciliation told IRIN the World Bank should have also helped Chadians directly fight poverty rather than only going through the government, “The damage has already been done…Chadians can only now cry because the oil money has not contributed to improving their living conditions but rather to fuel armed conflict.”

Oil revenue watchdog groups in Chad have accused the government of funneling oil revenue into fighting back periodic rebel groups trying to unseat the government.

For Gilbert Maoundonodji, coordinator of an independent oil pipeline monitoring group, the World Bank’s oil investment pull-out was not surprising.

“From the outset of the project, civil society groups said the basis of the agreement was distorted, and the World Bank could not make big changes in an environment where most promises are not kept,” he told IRIN.

“At the outset we asked for management capacity to be strengthened so that the project could succeed, but these were considered by many to be hysterical demands… now we are in exactly the situation that we predicted.” concluded Maoundonodji.

Others say the World Bank overstepped its powers. Government official Ousman, who did not want to give his full name, said, “We are a sovereign nation. We have our priorities. We are ready to fight against poverty, but we also have other major challenges to face, namely the Sudanese aggression. It isn’t normal that the World Bank can direct our behavior from Washington when the reality on the ground is so different.”

What next

Minister of economics and planning Ousman Matar Brémé told reporters in a press conference the World Bank’s withdrawal from the oil pipeline project will not have an impact on oil exploitation, and only minimal impact on social programs, “We will ensure that this impact can be minimised and our spending priorities are not compromised in 2008.”

While the World Bank decision to close this chapter of the project “is final” according to Wormser, Chad’s Prime Minister Nouradine Delwa Kassire is expected to travel in one month to Washington, DC to meet with World Bank officials. “We look forward to this discussion,” Wormser told IRIN.

Oil watchdog Maoundondji says he is doubtful any future deals could bring lasting change. “We are a country with a strong potential for development because of our natural resources, but instead we continue to impoverish our people.”